The effect of ICT use in enhancing market participation and household welfare outcomes among smallholder farmers in the Eastern Cape province of South Africa.
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Date
2022
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Abstract
Enhancing the ability of smallholder farmers to actively engage in markets is one of the most
pressing development challenges in sub-Saharan Africa. Despite being deemed significant
contributors towards the production of various commodities, smallholder farmers have weak
linkages to the markets. They are poorly equipped to make sound marketing decisions, partly due
to a lack of access to market information. As the agricultural sector becomes more knowledgeintensive,
due to the availability of the new information technology there is a greater need for a
good information flow and sharing among all agricultural stakeholders. Therefore, since
Information and Communication Technologies (ICTs) are emerging as key source of information
on new production technologies, they could contribute immensely to the amelioration of the dearth
of information among the poor smallholder farmers along the value chains and could thus link
them to profitable markets.
The number of mobile phone subscribers in South Africa is increasing daily and most rural
households currently own ICT tools. However, the extent to which rural households utilize these
technologies for agricultural activities remains unexplored. Therefore, this study adds to the
existing literature on the use of ICT amongst smallholder households by examining the effects of
its use in enhancing market participation and the household welfare outcomes among smallholder
farmers in the Eastern Cape Province of South Africa. Data were collected by using a questionnaire
survey from 246 randomly selected smallholder farmers in the Port St John’s Local Municipality.
The first objective was to investigate factors influencing the use of ICT by smallholder farmers for
accessing market information, by using binary logistic regression. The second objective was to
examine the effects of ICT-use on smallholder market participation and the quantity of green
mealies sold, by using the double-hurdle model, while the third objective was to assess the effect
of market access on the welfare outcomes of smallholder farmers, by using propensity score
matching.
The results from the descriptive statistics showed that 78% of the sampled population used ICT
for accessing market information, which was mostly accessed by using mobile phones. The results
also showed that only 2% of the population was familiar with agricultural farming applications,
with the mostly used applications being Leaf Snap, Plantix and Agri-assistant apps. Based on the
empirical results variables such as age, household income, access to electricity, and quality
network coverage, are positively and statistically significant in influencing the use of ICT by
smallholder farmers for accessing market information, while farm size was negatively and
statistically significant in influencing the use of ICT by smallholder farmers for accessing market
information. Among the variables tested against market participation and the quantity of green
mealies sold the farm-level characteristics that were found to be statistically significant for market
participation included gender, being a member of a farmer’ organization, access to extension
services and the use of ICT. The age, gender, farm size, and ICT use of those participating in
markets were found to be statistically significant in relation to the quantity of green mealies sold.
Furthermore, those variables tested with regard to market access, marital status, being a member
of a farmers’ organization or group, and access to market information were negatively and
statistically significant in relation to market access, while access to extension services, was
positively and statistically significant in relation to market access.
Based on the results, the study concludes that farmers in the study area are using ICT to access
market information. However, the use of ICT for accessing market information seems to be
ineffective for enhancing the market participation of smallholder farmers and their welfare
outcomes. This is shown by the negative effect on the use of ICT on both smallholder market
participation and on the quantity of green mealies sold. Therefore, the study recommends that an
awareness should be created focusing on the potential advantages of ICT applications and services
on agricultural marketing and that this should be accomplished through training. The supply of
marketing information alone to farmers is not sufficient for transforming their produce marketing.
Therefore, the study also recommends that farmers should be trained in how to interpret marketing
information.
Description
Masters Degree. University of KwaZulu-Natal, Pietermaritzburg.